High Tide Inc. HITI HITI (FSE:2LYA) released its year-end audited 2022 financial results, revealing revenue increased by 97% to CA$356.9 million ($265.4 million) for the year ended October 31, 2022, and increased sequentially by 14% to CA$108.2 million in the fourth quarter of 2022.
2022 Fiscal Year – Financial Highlights
Gross profit increased by 58% to CA$101.0 million for the year ended October 31, 2022, and increased sequentially by 15% to CA$29.5 million in the fourth quarter of 2022.
Gross profit margin was 28% for the year ended October 31, 2022, and was 27% in the fourth quarter of 2022, which was consistent with each of the prior two quarters
Adjusted EBITDA was a record CA$14.6 million for the year ended October 31, 2022, up 17% versus the prior year, and was CA$5.0 million for the fourth quarter of 2022, up 18% sequentially, and up 206% versus the fourth quarter of 2021
During the fourth fiscal quarter of 2022, the company completed its annual impairment testing. The company recorded impairment charges of CA$48.6 million, primarily relating to goodwill. The company noted that these are non-cash charges, with no impact on its ability to raise debt capital from its senior lender.
Cash on hand as of October 31, 2022, totaled CA$25.1 million, compared to CA$14.0 million as of October 31, 2021
Letter of Intent with Sanity Group
High Tide has entered into a non-binding letter of intent with the Berlin-based health and life science company, Sanity Group. With big progress on legislation expected this spring, the LOI is designed to leverage synergies between both complementary companies and position each to take advantage of potential German adult use legalization within their respective supply chain verticals.
Sanity Group and High Tide intend to work together on go-to-market strategies, identification of quality M&A opportunities, sourcing of real estate, expansion within European markets, and regulatory compliance topics such as licensing and government outreach.
The company's target is to add 40-50 new retail locations in calendar 2023, with Ontario representing the lion's share of the increase. At the end of November, The company launched Cabana ELITE, its premium paid membership offering and has already onboarded over 6,000 members. The company expects this number to steadily increase over the coming quarters.
With the continued increase in same-store sales and a wider retail footprint, High Tide is currently on an annual revenue run rate of over CA$450 million.
Throughout 2022, High Tide deployed its customized Fastendr technology in 120 locations across Canada, with this rollout continuing throughout 2023, including an opportunity to start licensing this technology towards the end of 2023.
High Tide shares were trading 8.09% lower at $1.59 during Tuesday's pre-market session.
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